July 13, 2000 | Read Time: 4 minutes
By JENNIFER MOORE
Several national organizations have joined together to sue Jefferson County, Ky., over its enforcement of a fund-raising solicitation regulation.
The case marks the latest in a series of court challenges to fund-raising laws by cities and counties. It is most similar to a lawsuit against Pinellas County, Fla., which is currently under review by an appeals court after a federal district judge sided with the county in late 1998.
In Kentucky, the legal battle is being led by Public Citizen, which told a federal court that Jefferson County’s charitable-solicitations act should be overturned because it is unconstitutional and unnecessarily burdensome.
The county, which includes the city of Louisville, requires non-profit organizations and their professional fund raisers to register each year before seeking money from the county’s roughly 673,000 residents. The charitable-solicitations act has been in effect since 1991.
John T. Spellman, the official who oversees charity registrations for the county, says he thinks most organizations can comply with the requirements fairly easily because the information requested is similar to information organizations already collect for the Internal Revenue Service and many states.
“I don’t think we’re calling for that much more labor-intensive work,” he says.
Many charities located outside of Jefferson County may be unaware of the registration rule.
Public Citizen, a Washington consumer-rights advocacy group, did not learn of the ordinance until last year, when it received a letter from the county saying it had violated the regulation by not registering before sending fund-raising letters to residents.
Lane Brooks, Public Citizen’s director of development and marketing, says it’s not just Jefferson County that worries him.
“The real problem is not one law, but hundreds of laws. We already spend almost an entire full-time equivalent of a person in just doing the state registrations. And when you start adding multiple local ordinances, all asking for completely different pieces of information, it simply doesn’t make sense.”
Public Citizen was joined in its lawsuit by Greenpeace and two other groups that have devoted much effort to challenging what they see as burdensome charitable registration and reporting requirements — the American Charities for Reasonable Fundraising Regulation and the National Federation of Nonprofits.
In addition to their general objection to the local registration requirement, the non-profit groups in the case took issue with several specific provisions of Jefferson County’s solicitations act.
For example, the county requires non-profit groups to provide personal information, including the social security numbers, home addresses and telephone numbers, and birth dates of top officers and employees, a requirement the lawsuit calls “invasive of personal privacy” and “unnecessary.”
The county also requires all registered non-profit groups and professional solicitors to provide fund-raising totals and other financial figures at the end of each calendar year, even if an organization operates on a different fiscal year.
“We keep our books and file with the I.R.S. on an October 1 fiscal-year basis,” says Joseph A. Zillo, Public Citizen’s chief operating officer. “Just think what it would cost us to redo our books for Jefferson County, not to mention what we might have to do for other states and localities if they decided they wanted information on a different basis.”
Mr. Spellman says Public Citizen’s lawsuit took him by surprise because up until now non-profit organizations have complied with the county’s requirements without complaint. More than 500 charities are registered with the county.
Mr. Spellman defends the county’s rules, saying that without personal information about top officers and trustees the county cannot do background checks on individuals associated with charities or professional fund-raising groups that appear to be involved in questionable activities. He says the county requires organizations to report figures on a calendar-year basis because that simplifies the collection process.
Ed Mazlish, a New York lawyer who represents American Charities for Reasonable Fundraising Regulations in the lawsuits against both the Kentucky and Florida counties, says he worries that “a lot of localities are becoming more aggressive in enforcing these types of requirements on charities, and they’re completely oblivious to the burden they’re putting on charities.”
What’s more, local attempts to regulate fund-raising appeals made via the Internet could make it even more difficult for charities to keep up with reporting requirements, Mr. Mazlish says. Even as the lawsuit against Pinellas County’s charitable-solicitations act is still pending, the county is considering expanding its registration requirements to specifically include solicitations made on Web sites or through e-mail messages.
A copy of the Jefferson County lawsuit is available on Public Citizen’s Web site at http://www.citizen.org/litigation/briefs/pcjefcty.htm.
